Emerging Shale Oil Plays
As the shale oil and gas revolution has picked up steam over the past several years, several important trends have emerged that will separate the winners from the losers.
The combination of depressed natural gas prices in North America and robust oil prices has prompted independent producers to ramp up drilling activity in fields rich in oil, condensate and natural gas liquids (NGL) while reining in operations in Louisiana’s Haynesville Shale and other dry-gas plays. By many accounts, natural gas production has become incidental to these higher-value hydrocarbons.
Besides focusing on a company's production mix, investors must also evaluate the economics and quality of a producer's acreage. first movers in oil- and liquids-rich plays have the opportunity to snap up the best acreage at a fraction of the costs incurred by late entrants. For example, Marathon Oil Corp (NYSE: MRO) recently paid $3.5 billion for 141,000 acres (about $21,000 per acre) in the Eagle Ford Shale from Hilcorp Resources Holdings LP. The deal surpassed Korea National Oil Corp paid $16,000 per acre to Anadarko Petroleum Corp (NYSE: APC) to establishing a foothold in this liquids-rich shale play.The elevated prices that latecomers have paid for acreage illustrate the importance of being an early mover in these plays. This strategy that has paid off for EOG Resources (NYSE: EOG), the leading oil producer in North Dakota, the Eagle Ford Shale and the Niobrara Shale. Lower entry prices translate into more financial flexibility and superior margins for producers that snap up the best acreage at pre-boom prices.
Readers of The Energy Strategist can attest to the importance of focusing on early movers that have acquired the best acreage.
My colleague Elliott Gue added Petrohawk Energy Corp (NYSE: HK) to the publication’s model Portfolio on May 10, 2010, citing the company’s acreage in the Eagle Ford Shale, a liquids-rich field in South Texas that the firm discovered in 2008. The stock represented a compelling value at the time; investors had overlooked this asset and the potential for the firm to grow its liquids output, focusing instead on its leasehold in the Haynesville Shale and exposure to natural gas prices. Elliott also highlighted the stock as one of his top takeover targets of 2010.
A year later, Elliott’s investment thesis panned out: Australian mining giant BHP Billiton (NYSE: BHP) announced that it would acquire Petrohawk Energy in an all-cash deal worth $12.1 billion. Readers who followed Elliott's call booked a 92 percent gain.
Bakken Oil Field - News
Should any of these fields prove to be world-class plays on par with the Bakken or the Eagle Fords, savvy investors could reap the rewards. We'd also like to tell readers about StockTalk, a new series of weekly discussions that aims to identify
Essential Energy Services Ltd. is bullish on the outlook for business due to an industry focus on oil and liquids-rich plays. The Calgary-based oilfield services company, which says it's Canada's
In particular, the Bakken formation, which extends from southeast Saskatchewan into South Dakota and west into Montana, has the potential of being one of the largest light oil pools discovered in Western Canada and one of the top onshore fields found
Terry Kovacevish, Bakken Asset Manager for Marathon Oil Company, has been part of the Bakken development the past five years. He says companies are continuously evaluating their safety programs. “What I have seen is a greater awareness of the safety
Opportunity #1: If you're chomping at the bit for a ground-floor opportunity, how about getting in on an oil play that's twice as big as Saudi Arabia's oil reserves—in the American Upper Midwest? The Bakken oil field, which straddles North Dakota and
The Bakken Boom « EPRINC
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Like unconventional shale gas, unconventional shale oil is now becoming more and more conventional. The technology used to first extract natural gas from shale rock in the Marcellus and other shale gas plays has been fine-tuned and modified to extract oil from shale formations across the country, such as the Monterey play in California, the Eagle Ford in Texas, and most notably the Bakken in North Dakota.
North Dakota has been an oil producing state for 60 years, but only during the past three years has the Bakken oil boom made it the fourth largest oil producing state in the country and one of the largest onshore plays in the United States. The Bakken extends beyond North Dakota into Eastern Montana and neighboring territories of Saskatchewan and Manitoba in Canada. While its success has been largely attributed to advances in oil field technology, primarily horizontal drilling and hydraulic fracturing, a number of circumstances have come together to make the Bakken a successful oil play, including high oil prices, widespread and ready access to privately held prospects, and low natural gas prices.
The USGS (U.S. Geological Survey) estimates the technically recoverable reserves in the Bakken at 4.3 billion barrels. Reserve estimates by states and companies are often significantly larger and in the past these estimates have been considered optimistic. However, many wells have had initial production (IP) rates of 2,000 barrels of oil per day (b/d). These IP rates suggest that estimates of the resource base will continue to rise. Higher estimates for the basin of 10 billion barrels or more can no longer be ruled out.
Similar to the early days of the shale gas revolution, major oil companies have been largely absent in the Bakken. Small and independent oil companies that made their start developing natural gas resources moved into the Bakken and accumulated acreage before the oil play became fully established. Today, the most sought after acreage in the Bakken is already leased. New entrants into the Bakken must participate in joint ventures or buy out another company. This has not discouraged investment. Several billion dollars were exchanged in mergers and acquisitions (M&A) in the Bakken in the fourth quarter of 2010 alone.
Bakken Oil Field - Bookshelf
1991 guidebook to geology and horizontal drilling of the Bakken Formation
Horizontal Drilling of the Bakken Formation Figure 3. Bakken Formatwn isopach map with 1978 oil fields, shows and fluid pressure gradients. ...Law in the western United States
He exhibited a hundred telegrams signed by five hundred oilmen requesting martial law to restore order and stability in the East Texas oil field. ...Petroleum geochemistry and basin evaluation
The fact that Bakken/Sanish wells at Antelope field have produced as much as 900000 bbl of oil per 160 acres from an approximately 120-ft thick gross ...Proceedings of the F.D. Holland, Jr. Geological Symposium
Limit of Upper Shale Limit ol Middle Mimbu Limit ol Lower Shale BAKKEN OIL FIELDS 1. Stonaviaw 2. West Tioga 3. Eaat Molllund 4. Antalopa 5. Keene 6. ...Stratigraphic traps
The Bakken Formation is a black, organic-rich, oil-prone shale that lies at about 10600 ft (3230 m) depth at Elkhorn Ranch field. ...Directory Information Directory
News from the Bakken Oil Play in North Dakota
Mountrail County, North Dakota, has an oil boom in the Bakken formation. News and information about Mountrail's oil play.
Bakken Oil Shale Map - North Dakota- Bakken Shale Formation
Bakken Shale - Bakken Shale Maps - North Dakota, Montana Oil Field. Bakken Shale Oil Formation - Largest Oil Pool Found - Parshall Field in Bakken Shale & Three Forks Zone ...
The Bakken Oil Field: Fact or Fiction?
The North American Bakken oil field has received a fair degree of news coverage recently amid claims of up to 500 billion barrels of crude oil under the ground.
Bakken formation - Wikipedia, the free encyclopedia
Map of Bakken Formation reservoirs in the US portion of the Williston Basin (Saskatchewan is north border). Most oil comes from Elm Coulee Oil Field ...
Bakken Shale Formation - Bakken Oil
Bakken Shale Formation of North Dakota is a Hot Oil Play! The Oil Rush is on and the Oil Companies are Rushing to the Bakken!